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Tuesday, July 23, 2013

Paul Krugman Talks Trade

Paul Krugman rarely ventures into transportation territory,
but a recent post of his should stimulate some thought among transportation
folks, especially goods movement people.

In this blog posting “America is Flat” (here) he calls
attention to some data showing a decline in Americans moving from state to
state and to some other data suggesting, at least, that domestic trade (as
opposed to international trade) is trending downward.The reason?The
U. S. economy has become less regionally specialized over the years.We no longer live in a time where steel
comes from Pittsburgh and butchered hogs come from Chicago.The daily occupations of most Americans
just don’t differ that much from region to region, so we don’t have that much reason
to ship things to one another or move from place to place.

Krugman also suggests that the big rise in international
trade isn’t necessarily due to some “inexorable force,” and may be “more
special and less generic than often imagined.”

He doesn’t leave us with a takeaway – in fact saying he has
no idea if there is any policy relevance in these findings – but I will suggest
two, both of which you have heard from me before.

First, we should be cautious about making straight-line
projections of future growth in imports (and investing billions of dollars
based on those projections) and assuming that current trade patterns will
persist indefinitely.A lot can
change.

Second, we should really start scratching our heads about
what a future with more decentralized, high-tech manufacturing might look
like.We are in the age of the 3D
printer after all.